Taxi rival Uber admits it's not a top employer, because its drivers aren't employees

Uber already has 15,000 drivers in Australia and is on track to surpass 20,000 by the end of the year.

Which is a fairly astonshing achievement for the highly popular app enabled car ordering service, when you consider it only launched its key ridesharing service in Australia about a year ago. By way of comparison, there were around 21,000 cabs on the roads in this country (and 68,000 cab drivers) at the end of 2014, according to the Australian Taxi Industry Association.

Uber has been fighting hard in the US to ensure that its drivers are treated as independent contractors, and explicitly not employees. Photo: Bloomberg

The news of the stunning driver growth was exclusively revealed this morning by The Australian who said the growth meant Uber was poised to become one of the country's top employers, ahead of well known companies like Macquarie Group, Flight Centre and Fairfax Media, which operates this website.

The semantics might be off - we'll get to that shortly - but it's clear that lots of people are making a living, or supplementing their income, through Uber. Which is great. Yet what is really fascinating about this exclusive story is that it sheds light on the hotly debated labour dynamics at the heart of Uber's business model.

It's clear that lots of people are making a living, or supplementing their income, through Uber. Photo: Andrew Harrer

Uber has been fighting hard in the US to ensure that its drivers are treated as independent contractors, and explicitly not employees. It's a very important distinction that also applies here. Drivers in Australia are also independent contractors, they have the freedom to choose when, where and how often they work, and are also responsible for their own tax and financial affairs, the company says. Which means they don't, for example, get superannuation contributions from Uber. They pay this out of their own pockets. "We are definitely not a 'top employer' but we have created 15,000 jobs [in Australia] over the past year," a local spokesperson told Fairfax Media.

This issue has become particularly contentious in Uber's home state of California. In June, the state's labor commission ruled that one driver who appealed her status as a contractor was in fact an employee (Uber appealed this ruling). Another court in California is currently considering whether to bring a class action lawsuit brought by drivers against the company over this very issue to trial. If the drivers were to win, Uber could face additional costs for up to 160,000 drivers in the state, and be forced to pay for things like Social Security, workers' compensation, unemployment insurance and potentially healthcare. Classifying drivers as employees would also mean Uber was liable for higher costs such as payroll tax in many juristictions.

The issue hasn't really come to ahead in Australia, where most of the focus has been on Uber's debated legal status and whether drivers should be forced to charge their customers GST. Last week, Uber announced to passengers that the cost of fares for its ridesharing product would increase by 10 per cent to cover these costs, although the company is challenging the ATO's GST ruling in the Federal Court.